Will Verizon's LTE Pricing Look Like a Utility Bill?

Verizon’s pricing for its next-generation Long Term Evolution Network will likely involve a base subscriber fee plus usage charges for the bandwidth consumed on devices that need a cellular connection, Verizon CTO Dick Lynch told the Washington Post. So the question now is whether the pricing model will resemble that of cable services, with a high base rate and then smaller charges for premium channels, or that of a utility bill, which see users pay a tiny charge each month and then a set rate for each kilowatt consumed. Or will it be closer to that of existing cellular pricing plans, complete with high base rates and punitive overage fees?

Also, how will the subscriber be billed for myriad connected devices? I’ve talked about carriers and consumer device makers looking at personal hotspots such as the MiFi to enable consumers to subscribe to one plan while still providing cellular connectivity for multiple devices. Yet Verizon showed off cameras embedded with LTE, which would seem to require a separate subscription from a consumer.

Whatever Verizon does, the announcement isn’t a surprise given that Lynch said eventually the wireline side of Verizon’s business would moving toward usage-based billing as well. Although at the time he held the cell phone industry up as a model for what usage-based billing for wireline service might look like. Perhaps the LTE plans will be a model for all broadband billing in the future, especially since wireless carriers are desperately trying to move away from flat-rate pricing (GigaOM Pro subscription required) amid a data tsunami.

I like the idea of proving a true metered service for mobile networks (for more on what I view as a true meter, read this), and given how competitive mobile data access could be across multiple cellular providers, Wi-Fi and WiMAX, I think we could actually get reasonable pricing.